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[PDF] The South African Film And Television Industry Report
n Audience development programs initiated by the Film Resource Unit Page 14 The SA Film and Television Sector Cultural Industries Growth Strategy (CIGS)
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CULTURAL INDUSTRIES GROWTH
STRATEGY (CIGS)
THE SOUTH AFRICAN FILM AND TELEVISION
INDUSTRY REPORT
REPORT TO THE DEPARTMENT OF ARTS, CULTURE, SCIENCE ANDTECHNOLOGY.
FINAL REPORT
November 1998
The report was commissioned by DACST to research the cultural industries and to propose strategies for their growth and development. The report does not necessarily reflect the views of the Department or the Ministry of Arts, Culture, Science and Technology but will be used to inform future policy formulation.The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 2
CONTENTS PAGE
LIST OF TABLES......................................................................................................5
LIST OF FIGURES ....................................................................................................6
LIST OF ABBREVIATIONS.......................................................................................7
EXECUTIVE SUMMARY............................................................................................8
SECTION ONE - INTRODUCTION..........................................................................17
1.1 B1.1.1 What makes the film industry important? .................................................18
1.2 W HAT IS THE FILM AND TELEVISION INDUSTRY? .................................................191.2.1 Film and Television Production and Delivery............................................20
1.3 M SECTION TWO - THE GLOBAL INDUSTRY...........................................................23 2.1 THE GLOBAL CONTEXT.....................................................................................23
2.1.1 The players ..............................................................................................23
2.1.2 Production................................................................................................25
2.2 GLOBAL TRENDS..............................................................................................26
2.2.1 Structure of global entertainment companies ...........................................26
2.2.2 The importance of the size of the market.................................................30
2.2.3 Distribution and Exhibition........................................................................32
2.2.4 The Broadcasting Environment................................................................33
2.2.5 Local Content Quotas...............................................................................34
2.2.6 Changes in the broadcasting environment ...............................................35
2.2.7 Market Fragmentation..............................................................................36
2.2.8 New markets in the global industry...........................................................36
2.2.9 Intellectual Property..................................................................................38
SECTION THREE - HISTORY OF THE SOUTH AFRICAN FILM AND TELEVISION SECTION FOUR - WHO'S WHO IN THE SOUTH AFRICAN FILM ANDTELEVISION INDUSTRY.........................................................................................43
4.1 OWNERSHIP STRUCTURES................................................................................43
4.1.1 History of players .....................................................................................43
4.1.2 Present Ownership Structures..................................................................43
4.1.3 Players in the value chain.........................................................................47
SUMMARY ...........................................................................................................55
SECTION FIVE - THE SOUTH AFRICAN INDUSTRY IN FIGURES........................57 5.1 SPATIAL DISTRIBUTION.....................................................................................57
5.2 P5.3 D
ISTRIBUTION AND EXHIBITION.........................................................................60
5.4 B
5.5 PROSPECTS FOR GROWTH................................................................................61
5.6 EMPLOYMENT FIGURE.......................................................................................62
5.6.1 Employment in the Value Chain ...............................................................62
5.6.2 Employment in the Location Industry........................................................64
5.6.3 Cost of labour...........................................................................................64
The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 35.7 T
HE SOUTH AFRICAN MARKET...........................................................................655.7.1 Growth in the market................................................................................65
5.7.2 Profile of Cinema Audiences....................................................................66
5.7.3 Occupancy Rates at cinemas in the townships and the suburbs..............67
5.7.4 African markets........................................................................................68
SUMMARY ...........................................................................................................69
SECTION SIX- EVALUATION OF THE FILM AND TELEVISION INDUSTRY.........71 6.1 T HE ARTISTIC OR CREATIVE MILIEU (BEGINNINGS)...............................................716.1.1 The market...............................................................................................71
6.1.2 The creative milieu...................................................................................71
6.1.3 Government Assistance...........................................................................72
6.1.4 Script........................................................................................................72
6.2 T HE VALUE CHAIN ANALYSIS FOCUSING ON PRODUCTION....................................746.2.1 Inputs.......................................................................................................75
6.2.2 The Production Process...........................................................................81
6.3 M ARKETING, MANAGEMENT AND DIFFUSION (CIRCULATION AND DELIVERY) ..........826.3.1 Distribution...............................................................................................82
6.3.2 Exhibition..................................................................................................84
6.3.3 Cash flow of distribution and exhibition ....................................................84
6.3.4 Initiatives in the local industry to link distribution and exhibition................86
6.3.5 Broadcasting........................................................................................... 84
6.3.6 Marketing of South African television productions outside of South Africa91
6.3.7 The African Barter Company....................................................................91
6.3.8 The changing broadcast environment in South Africa ..............................92
6.4 F EEDBACK (AUDIENCE FEEDBACK & DEVELOPMENT)...........................................93 6.5 H UMAN RESOURCE DEVELOPMENT FOR THE FILM AND TELEVISION INDUSTRY.......94 SECTION SEVEN - STRENGTHS, WEAKNESSES, OPPORTUNITIES ANDTHREATS (SWOT) ..................................................................................................99
SECTION EIGHT - POLICY DEVELOPMENT......................................................1018.1 INTERNATIONAL INSTITUTIONAL ARRANGEMENTS...............................101
8.1.1 Australia.................................................................................................102
8.1.2 France....................................................................................................102
8.1.3 India.......................................................................................................102
8.2 I NTERNATIONAL INCENTIVE MEASURES............................................................102 8.3 E XISTING INITIATIVES FOR THE SOUTH AFRICAN INDUSTRY................................1048.3.1. The Department of Arts, Culture, Science and Technology policy and
8.3.2 Private Sector Initiatives.........................................................................105
8.4 V
ISION FOR THE INDUSTRY.............................................................................106
8.5 T HE FILM AND VIDEO FOUNDATION: DEFINING ITS ROLE....................................1078.5.1 A role for the Film and Video Foundation...............................................107
8.5.2 Specific programmes and initiatives for the Film and Video Foundation.108
8.5.3 Time Frame for Film and Video Foundation Initiatives............................111
8.6 R ECOMMENDED INITIATIVES FOR PLAYERS OTHER THAN DACST.......................1138.6.1 Department of Trade and Industry Incentives.........................................113
8.6.2 Training and Development .....................................................................113
8.6.3 Audience Development ..........................................................................113
8.6.4 Lottery....................................................................................................114
8.7 S UMMARY OF RECOMMENDED INITIATIVES.......................................................114 8.8 CREFERENCE SECTION ........................................................................................124
The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 4B
PAPERS / REPORTS..............................................................................................124
ANNUAL REPORTS................................................................................................125
NEWSPAPER / MAGAZINE ARTICLES......................................................................125
W GOVERNMENT PUBLICATIONS................................................................................126
APPENDIX ONE - DETAILS OF INTERVIEWEES ................................................127The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 5
LIST OF TABLES
T ABLE 1 - OVERVIEW OF BIGGEST MEDIA COMPANIES.................................................25 TABLE 2 - US AND DOMESTIC BOX OFFICE..................................................................31
T ABLE 3 - PROJECTED INCREASE IN TELEVISION OWNERSHIP IN ASIA...........................37 T ABLE 4 - BREAKDOWN OF SOUTH AFRICAN PRODUCTION COMPANIES.........................49 T ABLE 5 - EMPLOYMENT FIGURES IN IPO COMPANIES................................................50 T ABLE 6 - CINEMA SCREEN OWNERSHIP 1996-1997 ..................................................52 T ABLE 7 - STAKEHOLDERS IN THE FILM AND TELEVISION INDUSTRY...............................55 T ABLE 8 - CATEGORISATION OF THE PLAYERS IN THE SOUTH AFRICAN VALUE CHAIN......56 T ABLE 9 - PRODUCTION CONTRACTS COMMISSIONED BY THE SABC 1991 -1996 .........59 T ABLE 10 - FEATURE FILM PRODUCTION 1979-1997 ...................................................59 T ABLE 11 - THE VALUE OF SECTORS INVOLVED IN THE DELIVERY OF CONTENT..............60 T ABLE 12 - EMPLOYMENT IN THE FILM AND TELEVISION VALUE CHAIN...........................62 T ABLE 13 - PEOPLE REPRESENTED BY OCCUPATION 1995............................................63 T ABLE 14- FOREIGN PRODUCTIONS SHOT IN SOUTH AFRICA 1995-1998 ......................64 T ABLE 15 - TELEVISION AUDIENCES 1996-1997..........................................................65 T ABLE 16 - OCCUPANCY RATE AT CINEMA COMPLEXES 1997.......................................68 T ABLE 17 - NUMBER OF TELEVISION RECEIVERS IN USE IN AFRICAN COUNTRIES...........69 T ABLE 18 - CASH FLOW FOR THEATRICAL PRODUCTIONS.............................................86 T ABLE 19 -SABC LEAST PROFITABLE PROGRAMMES...................................................90 T ABLE 20 - SABC MOST PROFITABLE PRODUCTIONS..................................................91 TABLE 21 - TRAINING INITIATIVES................................................................................98
TABLE 22 - SWOT ANALYSIS...................................................................................100
T ABLE 23 - INCENTIVES OFFERED BY THREE COUNTRIES...........................................104 T ABLE 24 - TIME FRAME FOR FILM AND VIDEO FOUNDATION INITIATIVES.....................112 T ABLE 25 - SUMMARY OF PROPOSED INITIATIVES......................................................122The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 6
LIST OF FIGURES
FIGURE 1 - LOCATION OF FILM AND TELEVISION INDUSTRY......................................19 F IGURE 2 - CENTRAL STATISTICAL SERVICES DEFINITION.........................................20 F IGURE 3 - METHODOLOGY FOR ANALYSING CULTURAL INDUSTRIES .......................22 FIGURE 4 - TOP TEN FILM PRODUCERS 1996..........................................................26
F IGURE 5 - NUMBER OF CINEMA SCREENS AVAILABLE FOR MAJOR RELEASES..........30 FIGURE 6 - SIZE OF MARKETS ...............................................................................31
F IGURE 7 - BOUGHT TO LOCALLY PRODUCED PROGRAMMING RATIO ........................33 F IGURE 8 - INTERNATIONAL LOCAL CONTENT QUOTAS............................................35 F IGURE 9 - OWNERSHIP STRUCTURE - PRIMEDIA ENTERTAINMENT..........................44 F IGURE 10 - OWNERSHIP STRUCTURE - SASANI........................................................46 F IGURE 11 - OWNERSHIP STRUCTURE - AME............................................................47 FIGURE 12 - INDUSTRY STRUCTURE.........................................................................48
FIGURE 13 - VALUE OF PRODUCTION.......................................................................58
F IGURE 14 - CINEMA ATTENDANCE 1990 - 1995 ......................................................66 F IGURE 15 - AUDIENCE PROFILE VS POPULATION PROFILE........................................67 FIGURE 16 - THE INDUSTRY STRUCURE...................................................................71
F IGURE 17 - FILM AND TELEVISION PRODUCTION PROCESS.......................................75 FIGURE 18 - PRIVATE SECTOR FILM FUND................................................................80
F IGURE 19 - CASH FLOW CHART FOR DOMESTIC THEATRICAL RELEASE.....................85 FIGURE 20 - PRIMEDIA STRATEGY.............................................................................87
F IGURE 21 - SABC COMMISSIONING PROCESS.........................................................89 F IGURE 22 - AVERAGE SA HOUSEHOLD R EXPENDITURE ON ADMISSION CHARGES.......93The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 7
LIST OF ABBREVIATIONS
AME - AFRICAN MEDIA ENTERTAINMENT
CBS - COLUMBIAN BROADCASTING SYSTEM
CIGS - CULTURAL INDUSTRIES GROWTH STRATEGY
CSG - CULTURAL STRATEGY GROUP
CSS - CENTRAL STATISTICAL SERVICES
FRU - FILM RESOURCE UNIT
IPO - INDEPENDENT PRODUCERS ORGANISATIONITB - INDUSTRY TRAINING BOARD
MEGA - MILLENIUM ENTERTAINMENT GROUP AFRICA
NFVF - NATIONAL FILM AND VIDEO FOUNDATION
NTVA - NATIONAL TELEVISION AND VIDEO ASSOCIATION OWN - OPEN WINDOW NETWORKPAWE - PERFORMING ARTISTS WORKERS EQUITY
SABC - SOUTH AFRICANN BROADCASTING AUTHORITY
SAGE - SOUTH AFRICAN GUILD OF EDITORS
SASC - SOUTH AFRICAN SOCIETY OF CINEMATOGRAPHERSSASWA- SOUTH AFRICAN SRCRIPTWRITERS ASSOCIATION
SCRAWL- SOUTH AFRICAN SCREENWRITERS LABORATORY
SWOT - STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATSWIFT - WOMEN IN FILM AND TELEVISION
The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 8
FORWARD
South Africa's diverse and dynamic arts and culture heritage is one of its richest and most important resources, with the capacity to generate significant economic and social benefits for the nation. Equally important, but less well understood, is the potential for a vibrant and dynamic arts and culture sector to contribute significantly to the economy of the country. The Department of Arts, Culture, Science and Technology (DACST) is contributing to the government's Growth, Employment and Redistribution (GEAR) strategy through a number of initiatives intended to enhance the economic and social benefits of arts and culture. The Cultural Industries Growth Strategy (CIGS) is one such initiative and has concentrated on developing strategies for the growth and development of the cultural industries, in particular to realise their potential to create an export market, to create employment, to ... DACST appointed the Cultural Strategy Group, a multi-disciplinary consortium, to undertake the research and policy aspects of the study. The team included KPMG, the Centre for African Transformation (CART), LMA/SQW policy and research consultants and BDM consulting. The term "cultural industries" is used to describe a wide variety of cultural activities which all have commercial organisation as their prime motivating force. These activities take a number of different forms and are organised in different ways from the manufacture or creation of products to the marketing and distribution thereof. The cultural industries that CSG concentrated on included: the music industry; the craft industry, publishing industry and the film and television industry. Their selection was based on a number of criteria including the recognition that these sectors were identifiable industries in South Africa; are potentially internationally competitive; have the potential to create employment and offer opportunities for rural and urban job creation. The cultural industries tend to be: knowledge intensive, involving highly skilled workers labour intensive, creating more than the average number of jobs differentiated, taking the form of small and medium enterprises (SMMEs) and large enterprises and linked with close, interlocking but flexible networks of production and service systems, allowing the sector flexibility in the face of economic recession Understanding the global context of the cultural industries is of crucial importance if any attempt is made to develop them. The politics of the "New Economy" and phenomena like the Internet make understanding these processes absolutely necessary. The CIGS process was designed to ensure a critical dialogue with experts from other countries where successful strategies to develop the cultural industries within this global context has been undertaken. The methodology followed for the CIGS study is an industry strategy analysis. Each sector report is therefore principally an economic analysis providing baseline data for each of the four sectors, and focusing on the current economic and social contribution of each sector; the impediments to growth and the opportunities for employment creation and competitive development.The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 9Each sector report concludes with strategic policy recommendations and interventions for both the public and private sector. These recommendations aim to: maximise investment opportunities in the sector; highlight areas for government participation and legislation; identify potential private sector initiatives; leverage in multiple funding sources and benefit all stakeholders and practitioners within the industry and the economy as a whole This report is one of four sector studies. A fifth document "Creative South Africa" presents the argument for taking cultural industries seriously and develops a strategy for doing so. The principal vehicle for this is the recommended Cultural Industry Development Agency (CIDA), a public-private partnership agency specifically geared towards building up the cultural industries. The primary functions of this organisation would be knowledge and information management, human resource development, strategic investment, grant funding as well as advocacy on behalf of the cultural industry sector. While CIDA will develop initiatives in the cultural industries which have a high potential for commercial success as well as stimulating some already flourishing enterprises, the challenge lies within the industries themselves in order to realise themselves as mainstream sectors capable of being involved in the political, economic and social agenda of our country. CSG hope that the information within this report goes some way to enabling this.The SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 10
EXECUTIVE SUMMARY
The Cultural Industries Growth Strategy (CIGS) is an initiative of the Department of Arts, Culture, Science and Technology. The aim of CIGS is to develop growth strategies for the film, music, craft and publishing industries. This report reflects the findings of this process for the South African film and television industry. The report was commissioned by DACST to research the cultural industries and to propose strategies for their growth and development. The report does not necessarily reflect the views of the Department or the Ministry of Arts, Culture, Science and Technology but will be used to inform future policy formulation.Why is this industry important?
The Film and Television industry is important on three levels, the social, political and economic levels. First, this industry plays an important role in communicating ideas, information and ideology. Second, on a political level, this industry provides a forum for debate and discussion as well as information which is essential for citizen's participation in community life. Third, economically this is an industry which turns over billions of dollars and generates millions of jobs throughout the world. In 1997, the global entertainment industry generated US$172,50 billion. The entertainment industry includes film, television, music and publishing. The film and television industry generates jobs directly in production and post-production companies, through casting and crewing agencies, in equipment-hiring companies, through set design and manufacturing companies and prop suppliers. Jobs are also created indirectly in supporting industries such as the hospitality industry in catering firms and hotels, and the transport industry.Trends in the Global Industry
A number of trends are evident in the global film and television industry that impact on the South African industry. These include: Increasing levels of vertical and horizontal integration as well as concentration of ownership. Vertical and horizontal integration of entertainment companies result in greater profit maximisation due to the ability to recoup revenue across a number of delivery channels. For example the research and development cost of a Disney production is recouped through the box office sales, video and pay television as well as through the sale of merchandise such as T-shirts and stationery with pictures of the characters printed on them. Increased concentration of ownership has led to higher barriers to entry for new entrants into the global industry. Increased distribution channels due to the advent of digital and satellite technology that has created a greater number of channels. The impact of increased distribution channels has been a fragmentation of audiences as audiences have greater choices regarding the programs that they watch. This has resulted in two options for filmmakers. They can target a mass audience by accessing bigger budgets in order to employ high profile actors, actresses and directors and bigger and better special effects. Alternatively, they can target niche markets and access smaller audiences. It is recommended that the South African industry adopt the second approach. Independent producers are most equippedThe SA Film and Television Sector
Cultural Industries Growth Strategy (CIGS)
© DACST
November 1998 11to address the needs of niche markets as they are used to working with smaller budgets and are often more in touch with the tastes of these markets. A secondary pricing system has developed in the global television industry. This refers to a situation where production studios recoup a great deal of their costs in the domestic market. They then sell the production to foreign markets at a cost below the cost of production. This means that no locally produced production can compete with a foreign production. It also means that industries with large domestic markets such as America have a big advantage over industries with smaller markets such as South Africa. Therefore, it is imperative that broadcasters retain local content quotas.The South African Industry
The South African entertainment industry is worth approximately R7,4 billion. The South African entertainment industry is comprised of the broadcasting, cinematic, music and interactive industries. Of this figure, the film and television industry is worth R5,8 billion and employs approximately 20 525 people. The South African film and television industry has been struggling to overcome the history of badly directed and managed funding schemes, intense censorship and a lack of equity in opportunity. The 1990s have seen a drop in the level of production. This is however due to the fact that during the 1980s many films were being made under the auspices of the tax incentive scheme, many of which were never seen by any audiences anywhere in the world.The biggest problems in the industry have been:
'=limited access to financing '=limited access to distribution and exhibition facilities '=insufficient audience development '=few training opportunities for people entering the industry as well as producers, directors and scriptwriters currently working in the industry '=a small domestic market '=few opportunities to export South African film and television products '=a lack of understanding of the needs of the market by South African film makers '=inadequate co-ordination and an absence of standards in training provision A number of important developments during the late 1990s indicate that the film and television industry has the potential to grow significantly in the future. Firstly, the government has acknowledged the importance of the film and television industry and is implementing a number of important initiatives aimed at developing the industry. These include: '=The National Film and Video Foundation (NFVF) which aims to promote an indigenous film and television industry in South Africa. This foundation will be set up during the course of 1998. The FVF could fund such diverse activities as training, production, distribution and exhibition and research.'=The government over the last two years has used the Interim Film Fund of R10 million to stimulate new projects in the industry. During 1996/97 alone 300
proposals were received. Of these 96 received funding. In 1997/98 605 funding proposals were received, 165 of which were funded. '=Attendance by government and industry representatives at international film markets.